Thursday, September 16, 2010

After BP (NYSE:BP) Spill, US Wants All Idle Gulf Wells Plugged

In what appears to be a ridiculous proposal, the interior department has ordered all idle Gulf of Mexico oil wells to be plugged, in response to the BP (NYSE:BP) oil spill.

According to offshore oil regulator Michael Bromwich, the oil infrastructure poses an environmental threat to the area, although natural release of oil in the Gulf on an annual basis is greater than that released by the BP accident.

There is also the credible belief that oil replenishes naturally, and is perpetual as far as the oil wells are concerned. If that is true, they could be plugging oil wells that could be producing wells indefinitely.

At this time there are about 3,500 non-producing wells in the Gulf of Mexico, along with about 650 oil and gas platforms not in use, which would also be required to be dismantled, although it wasn't clear what risk they pose in any way.

Parameters of the order are for wells that haven't been used in the last five years, along with their structures and pipelines.